Wednesday, November 23, 2011

6 Ideas for Reforming Business New Brunswick

Regular readers will know that I've questioned the Alward government for focussing on the deficit at the expense of a real jobs agenda. Yes, the fiscal balance needs to change, but if we are going to withdraw public money from the economy during a global slowdown, we had better have some solid plans on economic development.

The government department that quarterbacks this strategy needs to be part of that plan.  So far, the promise of more private sector expertise at InvestNB has not really changed how the department operates. Judging by the flow of press releases in the Minister's name, it's the same game plan with an advisory board in place. 

At a recent leadership candidates' forum I was asked about BNB reform. Here are some ideas I offered...

(1)    Re-think staff structure.  Good businesses guide employees through incentives, not micromanagement. Business New Brunswick should reflect this -- each unit should have measurable goals and targets, with staff paid based on results, with incentive pay for bringing companies and jobs into the province.

(2)    Build government's skill-set.  Too often, economic development teams hire those with experience in government agencies, affirming the culture of subsidies and saving existing businesses. Priority should be placed on bringing in private sector talent skilled in sales and global contacts, and we should use headhunting agencies where appropriate.

(3)    Go after the markets with emerging middle classes.  The fact we have no emerging market strategy to go after the 500 million new middle class consumers in China, India and Russia...let alone one for the African nations like Ghana and Rwanda who had double-digit economic growth rates, shows how locked BNB has been in subsidizing what we have.  For emerging markets, there needs to be a clear strategy to establish business contacts with countries that have growing economies, like China and India, with staff to support them. For instance, the lack of a China strategy, and staff with language skills and connections to that market, needs to be remedied.

(4)    End preferential treatment of industries.  We have rigid rules about what sectors we will, and won’t support, which sounds like government picking winners and losers to me.  Let's use community plans and strengths to develop cluster strategies that offer effective job creation tools with clear measurement of results and greater focus on mentorship and angel investor help to foster new enterprises and jobs rather than bailouts.

(5)    Create an Entrepreneurship Desk to deal with the soft barriers to new business.  Too often, new businesspeople from the Maritime Provinces lack the mentorship and help they need in finding needed angel investors, or capital, or just advice. We need to encourage private sector leaders to design networks across the province, country, and world that erase the competitive disadvantages faced by rural communities in New Brunswick.

(6)     Ensure every department understands its job creation mission.  InvestNB's private sector expertise should be used to have a jobs audit of every department, maximizing their role in the economy. For example, the National Governors' Association in the U.S. has a Rural Arts-based Economic Development manual, but our Culture department doesn't have a desk for those issues. The Education Department hasn’t gotten strategic advice from BNB in leveraging their foreign schools to open markets. Reinventing government for a jobs-based mission should be a government-wide initiative led by BNB. 

These are just a few steps that can be taken to reform Business New Brunswick, and make it an effective agency to foster entrepreneurship, open new markets, and especially create jobs.

Thursday, November 17, 2011


As they often do, a Twitter exchange has really got me thinking.  Here's how it all started....

Jeff Thompson, a gentleman well worth following @thomjeff , was kind enough to read a recent blog post of mine on economic management, and to offer up some words of praise.  After doing so, he asked a question -- why hadn't these ideas been raised, or heard from, during the Graham era? Did this mean the cabinet was ineffective?

I offered up, in explanation, the observation that Donald Savoie once made that cabinets have evolved into being focus groups for the Premier's Office. 

The observation is a general one, by the way, and true of the cabinet structure almost everywhere.  Ministers receive proposals that have already developed in the department, in consultation with the Premier's staff.  Ministers can offer thoughts, critiques and even attempt to stop these things, but the ability of, say, the Minister of Agriculture to steer a new idea for, say, health care reform through is very limited. She may debate the ideas that come, but there isn't a way for a new idea to come up unless it is adopted by the Department.  And since those departmental proposals don't usually come to cabinet until the department has worked on them for months, and the Premier is at least generally disposed to allow cabinet to pass it, an entirely new idea may be unwelcome at that late stage. This, structurally, may explain why you might see former ministers of health and/or education offering ideas today on economic development and natural resources that are new. 

After the keen-eyed Jacques Poitras retweeted my thoughts, my friend Chris Baker, who has sat in those rooms, offered an observation and a question.  First, he pointed out that I likely sat in the same room as BNB Minister Jack Keir and yet had expressed differing levels of satisfaction with the cabinet process.  He then asked, fairly, what is wrong with focus groups?

On the first point, I would simply say that two decent, thoughtful people can always sit in the same room when a decision is made and have differing levels of satisfaction.

No two sentient people, let alone folks as ornery as me and Jack --could deal with all those cabinet issues and agree on everything.  I would allow that I'd agree with Jack and other Liberals more than I would with the Alward team....and if I had to trust someone enough to disagree with them but have faith they might be right, there's no one I'd trust more than Jack Keir.

But that's not the big issue.....

Since I have allowed my name to stand among those who might aspire to sit at the head of that table, I figured it is fair to ask me just what I think is wrong with the cabinet structure.

I do believe that our governments have become too weighted in favour of the first minister and the unelected advisors that surround them.  Savoie's use of the "focus group" phrase is pretty fair. In the cabinet system, the Premier's Office and Executive Council determine which proposals are ready to go cabinet, and that means that issues that haven't yet won their support rarely get debated, and things on the agenda have largely already been vetted by the advisors and recommended to the Premier.

In general, if you have an idea on how to do things better, unless it is in your department, you would have a quicker route to get your idea heard if you were an advisor in the Premier's Office than to be a cabinet minister. 

(Let me say something VERY important here, and if anything here is quoted out of this context, then the quoter is trying to mislead you.This is true of how the cabinet structure works in Canada today, and that's what Savoie was saying.  This does not emanate from any particular event I witnessed while serving in cabinet in 2006-10, and it is not a veiled attack on anyone.  Our cabinet functioned like the others, and with men and women of good faith and high ability playing their roles in it -- the roles the system assigned to them).

The problem with the focus group model is that, in the end, it is all about influence on one person.  And that structure too often shields the premier from hearing real debate and diminishes the role elected people are meant to have.  To justify that statement, let me explain how cabinet works.

Cabinet works on consensus, in theory. Now, anyone who thinks about it for thirty seconds would know that this is a legal fiction....twenty politicians in a room won't agree on everything for four years with no debates or differences.  Consensus simply means that once the decision is made, those who got to have the debate at the highest level agree that they all support the decision publicly. This is done so real debate can happen in trust that people can be completely honest in the discussion, and so there is a cohesive executive running the government afterwards.

So, where does "consensus" come from?

You don't vote, by the way.  And no premier could possibly wait until every minister agrees before moving ahead -- a room with 20 vetoes can't work.  Once you accept that, you accept that there will be moments where a premier has to say "OK, we are moving forward, and this is our decision.". And, as you know, once a premier does that, then ministers must either support the decision or resign from cabinet (and in today's political reality, that often means leaving the caucus and party as well).  So, that's a big moment, and every premier can do it differently. 

A premier may try to involve many ministers in drafting the proposal, or try to broker a compromise at the table.  He may ask debating ministers to work out a proposal, or simply round off controversial parts of a proposal.  He may also tell the whole cabinet that he is the premier, and this is how it will be.  On different issues, the same premier may even take different approaches, willing to compromise on some things but insistent upon others.

Joey Smallwood was on one extreme.  He tended to assemble his cabinet, read the proposals and declare them passed.  In "No Holds Barred", his former minister John Crosbie tells of a new minister who joined the cabinet and was so excited he offered an opinion on every proposal.  Afterwards, Premier Smallwood asked him if he liked cabinet, and when the new minister expressed his love of the new job, Joey replied "Oh, you were talking so much I thought you weren't enjoying it.". The message got through.

That is an extreme example. But the thing with focus groups is that you only have to listen if you want to.  A premier can, in theory, tell a cabinet before an issue is debated that it will pass no matter what. He may bring limit debate and say he's heard enough. If she is tired of hearing complaining, she can even skip hearing the debate all together and leave instructions with a deputy premier to chair the meeting and declare the matter passed. Again, IN THEORY, that is how absolute a premier's power is.

There were checks and balances on this in a parliamentary system, but these have been lost over time.

The usual check and balance on this is that if a premier ignores caucus opinion, caucus may vote to replace the leader (in Britain, this is still the case -- Margaret Thatcher was deposed and her replacement elected by her caucus). But in the leadership convention era, caucus must accept the leader.  The selection is more democratic, but once selected, the leader's power is more absolute.

As well, in small legislatures, often over half of caucus is in cabinet and bound to silence after a matter passes.  That means that if a matter passes cabinet without full debate, caucus is likely neutered as well.  

So the only check and balance on a premier's power is the ability of a minister to quit.  However, this is obviously an extreme solution.  After all, most of us don't go to work believing we either agree with everything our boss does, or we quit. Most of us live in between.  That's especially true in politics -- after all, if you walk away from your job over one issue, you walk away from all issues. If you quit over the sale of NB Power, for example, you also quit on poverty reduction.  You quit, and that school you wanted to get built and that constituent whose mom needed help getting into a nursing home and that new policy you were working really hard all goes.  And most issues allow you some reasons not to quit; there are often decisions you don't love but were made better because you were at the debate, or things that are bad but not as important as that project you've been working on for months.  And besides that, even if you disagree with your party today, would you disagree with another party more often? Governing isn't a buffet. 

Most people in politics care about the work they are doing, and would find it hard to walk away unless they've tried everything.  For me, there are issues where I would have to vote against my party -- but only at the very last minute, when forced to vote on the passage of the measure, and only after trying behind the scenes to kill the idea without a vote.  To leave to protest a matter that may never get voted on would be like a captain  bailing out of a ship because it might hit an iceberg an hour away.  So the premier's power to declare a matter settled has real power.

In the short term, the focus group model serves the premier well.  But in the long term, a party is not well served.  Because the premier is so powerful in determining if issues live or die, a culture sets in where people may not speak truth to power, and a premier can pursue an unpopular idea and be unaware of it. As well, since most premiers spend more time with advisors than with caucus, the unelected wing of the party grows more powerful than those who must get an earful at community breakfasts.  In a democracy, absolute power will get you killed eventually.

So, OK, smart guy....what would you suggest to break away from the focus group model, short of some pie-in-the-sky constitutional amendment?  

Here's what I would advise a premier to do.

Create a functional standing cabinet committee structure. Have some issue-oriented committees chaired by ministers, not the Premier.  Give them the power to review issues and develop new proposals, and let their chairs have day-to-day authority to direct research from deputy ministers. Involving more ministers in making policy, instead of just reacting to proposals, will broaden debate.

Give legislative committees a real role in studying issues and proposing solutions.  And create more legislative time for the study (not just choreographed debate) of private members' bills.

Get on social media for regular question periods with the public.  And, no, having your staff tweet for you doesn't count.

Ask the party to amend the party constitution to allow caucus a role in determining leadership reviews to restore their power to get your attention. 

One last point....don't read too much into this. This is about a structure that exists in all governments. I will never tell you who, on what issue, was pushing the issue forward or begging the team to stop.  I will allow that even if you knew, I make no claim it would make me look better....I made some big mistakes in argument in that room and benefitted from the debate and loving butt-kickings some colleagues gave me.  I will even say (because I can say this), on the French Immersion file you can credit the whole team for the courage to finally tackle the streaming issue, but blame me and me alone for a process that rushed the solution without bringing the public in on the problem and humbly asking for help.  Please read this essay as a structural critique, not some over-hyped tell-all.

In the end, though, it isn't all about structure. Premiers have to be able to make up their own mind and have their own values without being scripted by back room advisors, and confident enough to welcome debate and criticism.  You want to know that when you raise objections with a premier, you're actually debating them and not some advisor you'll never see.  That's why I've been telling audiences of Liberals that the leader we elect today must be the best person to be premier tomorrow, not just the right one to get elected.  It's also why any of us who run should be tested on ideas and values.  There is no one biography that makes one ready for the power of the Premier's Office...there are only individuals who the public has a duty to scrutinize closely.

Tuesday, November 15, 2011


We've seen this show too many times before - a candidate says whatever a pollster tells them to say on the campaign trail, often making unrealistic promises, and then they disregard these promises once faced with the hard realities of governing.
You can find examples of lots of politicians skimming the truth, but David Alward's Progressive Conservatives take the prize, with their repeated campaign pledges in 2010 to not raise taxes... only to have raised taxes in their first budget and now talk about raising taxes again in their second budget.
As this Bob Jones piece on the CBC shows clearly, the Tories' rhetoric was always to deny they would have to raise taxes. "We have a spending problem, not a revenue problem" was part of their written talking points, and they ran as the party of low taxes. When you hear the Premier now say when he said "we will hold the line on taxes that affect ordinary New Brunswickers" that he really, really meant only sales taxes, he makes the error worse because it is doubling down on a lie. He would be better to cop to the fact that he ran not knowing much about the job of Premier, and people were so mad at the incumbent that he chose not to think to hard about it.
The real problem is that politics-as-usual avoids the serious discussion we need in this province about our budget and about our economy. I've often said that I believed that in a global recession, New Brunswick was right to spend to keep people working and money flowing in communities. The capital budget and the enhanced social spending for working families (who tend to spend money in their communities) kept businesses afloat and families solvent. That's why every Western democracy -including the Harper government- did similar things. It's also why, as even Premier Alward acknowledged after he disposed of the Liberals at the polls, "New Brunswick weathered the recession fairly well". In many cases, like in the U.S. and Britain, governments who cut too quickly after saw the recovery swoon again and jobless numbers rise.
But I've also said that I think it was an error to keep the deep tax cuts (which are inefficient stimulus) for the wealthy, because it left a structure in place that would hurt our ability to repay that necessary stimulus.  It never weakened my resolve to be a Liberal - the Tory line then was to cut spending and keep the tax cuts, which was worse - but I do think we should roll back those tax cuts for folks like me who can share in the sacrifice.
But David Alward got to rail against deficits, promise more social spending, and say he would hold the line on taxes. He should be grateful he got away with it; mere decency would suggest he should acknowledge it now and thank people for the chance to put it right by governing with more intellectual integrity than he showed in the campaign.
The real weakness of Alward's approach -- that in the campaign he seemed to suggest government had failed if it made any decision that angered anyone; that with enough consultation no one need ever disagree -- is that it leads to bad government.  Alward's Tories want to please everyone, which ultimately means that those with the least voice - the poor and vulnerable - suffer, as seen with the Alward government's rolling back of our government's anti-poverty program.  It's a program David Alward proclaimed his support for on the campaign trail, but it harms those who don't have much power, so a weak leader who fears controversy will drift into picking on the weak, like school kids and the poor.
We need a frank and adult conversation about our province's finances, and we need to be honest. I have already put out my position that we need to look at new sources of revenue. I have proposed - in the spirit of bi-partisanship - to roll back the Graham tax cuts for those earning over $100,000 per year and use that money to invest in education (K-12 and post-secondary) which is vital if we are to have a growing economy, as a skilled workforce is essential in a 21st century global economy.
David Alward was never willing to have this discussion. But I say we challenge him, and ourselves, to rise above the tired politics as usual.  Let's attack the deficit without this doublespeak, and phony consultations where the Minister passively let's everyone vent and then says he's decided, say, that schools needed cutting because he's sure he heard that somewhere.
A short-term deficit was a tough, but necessary, decision to weather the recession together.  Now, let's come together as citizens to share in the sacrifice of paying for that necessity.  We can start by engaging in a public consultation process similar to that undertaken during the development of the poverty reduction strategy. We bring government, private business, and citizens together; we open the books and we work through solutions. When engaged as responsible adults New Brunswickers take to the task at hand and come up with solutions that are recognized and praised nationally.
We need to do this again for our finances. Let's get a citizen's assembly of 100 citizens together with business and NGO leaders.  Make sure teachers, and parents, and entrepreneurs, and those living in poverty are in the room.  Open the books.  Let citizens see what cabinet sees.  Make the deliberations live on the web and invite feedback and questions.  Develop a people's budget plan based on real, honest debate.
 And when asked how we will rein in a $700million deficit without more revenues or cutting expenses, let's be honest enough to say it will actually take both.  You can't find $700million by cutting the poor -- if they had it, they wouldn't be poor. You won't find it in schools that were the lowest-funded in Canada under the Lord government and only started to catch up under Shawn Graham.  But we will trust the voters with real information and engage, because citizens could hardly show less courage or do worse than the politicians are doing right now.
We need a serious discussion about New Brunswick's economic future. Mr. Alward did not run as a serious candidate, and he is losing time to act as a serious premier.  As Liberals, let's trust that the people grasp the seriousness of the moment -- and reward honest leadership.